The Centers for Medicare & Medicaid Services finalized the Global Benchmark for Efficient Drug Pricing Model. The rule establishes a mandatory payment model to test whether alternative rebate calculations based on international drug pricing reduce costs for Original Medicare beneficiaries and the program while preserving quality of care.

The agency estimates $440 million in overall savings in Medicare Part B net spending during the 7-year payment period. Annualized cost savings in Medicare Part B net spending are approximately $80 million. Estimated Original Medicare Part B benefit savings are $298 million, and estimated premium offset impacts are $147 million. Estimated Medicaid program savings are $39 million.

The GLOBE Model is a new mandatory Medicare payment model under section 1115A of the Social Security Act. The regulations are effective on November 30, 2026. The model performance years run from April 1, 2027 through March 31, 2032. The payment period runs from April 1, 2027 through March 31, 2034.

The annual Federal revenue contribution to Medicare Part B increased from $235.6 billion in 2016 to $386.0 billion in 2024. Total Medicare Part B beneficiary premium amounts increased by $39 billion, or 53 percent, from 2016 to 2021. The total number of Medicare beneficiaries increased from 52 million to 58 million from 2016 to 2021. The Medicare Part B premium amount per enrollee increased from $1,423 in 2016 to $1,942 in 2021.

One in four adults taking prescriptions report difficulty affording their medication. Forty percent of adults taking prescriptions with household income of less than $40,000 per year report difficulty affording their medication. About 4 in 10 older adults with Medicare reported problems accessing healthcare because of its costs.

Fourteen percent of Medicare beneficiaries stated they skipped taking or sometimes did not even fill their prescription because of the expense. Medicare patients with cancer and certain chronic conditions are more likely to report cost-related medication non-adherence.

Why It Matters

The finalization of the GLOBE Model represents a significant shift in how the federal government approaches drug pricing within Medicare Part B. By tying rebate calculations to international benchmarks, the agency aims to address the rising costs that have led to increased federal revenue contributions and higher premiums for beneficiaries. The revised savings estimate of $298 million for Original Medicare Part B reflects adjusted assumptions about manufacturer behavior, a substantial reduction from the initial projection of $8.4 billion proposed in 2025.

This mandatory test occurs against a backdrop of documented affordability challenges for Medicare beneficiaries. Surveys indicate that a significant portion of older adults face barriers to accessing care due to cost, with some skipping prescriptions entirely. The model's implementation follows previous initiatives under Section 1115A of the Social Security Act, positioning it as part of a broader effort to control spending while maintaining quality of care for those with chronic conditions and cancer who are particularly vulnerable to cost-related non-adherence.

Timeline

On the same date, the agency established that the GLOBE Model is a new mandatory Medicare payment model under section 1115A of the Social Security Act. Also on September 30, 2026, it was determined that the GLOBE Model will test whether a payment model that uses an alternative method for calculating Medicare Part B drug inflation rebate amounts for certain separately payable Medicare Part B drugs and biological products reduces costs for Original Medicare beneficiaries and the Medicare program.

The agency estimates $440 million in overall savings in Medicare Part B net spending during the 7-year payment period, with estimated Medicaid program savings of $39 million, estimated Original Medicare Part B benefit savings of $298 million, and estimated premium offset impacts of $147 million.

What's New

Additional reporting indicates that the Centers for Medicare & Medicaid Services (CMS) has previously implemented similar drug pricing models, including the Medicare Part D Low-Income Subsidy (LIS) program, which provided financial assistance to low-income beneficiaries for prescription drugs. The GLOBE Model is part of a broader series of international pricing models, including the GUARD model for Medicare Part D, both proposed in 2025 under the Trump administration's drug pricing initiatives. It is the second major drug pricing initiative under the Social Security Act's Section 1115A, following the implementation of the Medicare Part D Competitive Acquisition Program (CAP), which aimed to reduce drug costs through competitive bidding.

The GLOBE Model was initially proposed in 2025 as part of the Trump administration’s efforts to address rising drug prices, with a projected $8.4 billion in savings for Original Medicare Part B, though this estimate was later reduced in the final rule. Estimated Medicare Advantage savings from the GLOBE Model are $288 million over the 7-year period, offsetting part of the $147 million premium impact. The GLOBE Model's initial projected savings of $8.4 billion (Original Medicare Part B) were revised downward to $298 million in the final rule, reflecting adjusted assumptions about manufacturer behavior. CMS previously implemented the GENEROUS model for Medicaid, which used international benchmarking for drug pricing, with 40 states and Puerto Rico participating as of 2026.

How Sources Differ

Sources differ on details regarding Original Medicare. The Centers for Medicare & Medicaid Services Final Rule CMS-5545-F states that the GLOBE Model will test whether a payment model that uses an alternative method for calculating Medicare Part B drug inflation rebate amounts for certain separately payable Medicare Part B drugs and biological products reduces costs for Original Medicare beneficiaries and the Medicare program while preserving quality of care.

Sources also differ on other details regarding Original Medicare. The Centers for Medicare & Medicaid Services Final Rule CMS-5545-F states that the rule establishes a mandatory payment model to test whether alternative rebate calculations based on international drug pricing reduce costs for Original Medicare beneficiaries and the program while preserving quality of care.

Sources differ on details regarding the GLOBE Model.

Sources differ on details regarding drug pricing. The Centers for Medicare & Medicaid Services Final Rule CMS-5545-F states that the Centers for Medicare & Medicaid Services finalized the Global Benchmark for Efficient Drug Pricing Model.